What sanctions and PEP screening is
Screening compares a name with published lists of people and organisations that need special care. It answers one question: does this name, or one like it, appear on a list? It is a quick check you run before you take on a customer, pay a supplier or appoint someone to a sensitive role, and repeat when your own policy says so.
There are two kinds of list, and they mean very different things.
Sanctions lists
A sanctions list names people, companies and groups that governments or the United Nations have restricted, usually for terrorism, the financing of weapons of mass destruction or serious international wrongdoing. Dealing with a listed party can be prohibited outright, and funds may have to be frozen and reported.
- South Africa. The Financial Intelligence Centre (FIC) publishes the Targeted Financial Sanctions (TFS) list, which gives effect to United Nations Security Council sanctions under the Financial Intelligence Centre Act. The FIC updates it as the UN adds and removes names, and you can search it on the FIC website.
- International lists. Many businesses also screen against other widely used lists, such as those of the United States (OFAC), the United Kingdom and the European Union, especially when they trade or bank across borders.
Politically exposed persons (PEPs)
A politically exposed person holds, or has held, a prominent public position: a senior politician, judge, senior government official, military leader or head of a state-owned company. Their family members and close associates are usually treated the same way.
The FIC Act calls them domestic prominent influential persons, for South African office holders and senior people in companies with large government contracts, and foreign prominent public officials, for office holders in other countries. Being a PEP is not wrongdoing. It means the person's position carries a higher risk of bribery or corruption, so a business relationship may need more questions about where the money comes from.
Who has to screen
Accountable institutions under the FIC Act, such as banks, long-term insurers, attorneys, property practitioners, gambling operators and some high-value dealers, must screen clients against the TFS list and apply extra measures to prominent persons, as set out in their own Risk Management and Compliance Programme. The FIC publishes guidance on what that means for each sector.
Many other businesses screen by choice, because paying a sanctioned party or taking on a corrupt official as a client is a risk to their bank account, their reputation and their customers. Common moments are onboarding a client, paying a new supplier, signing a lease and appointing a director or finance manager.
No single screen makes a business FICA compliant. If you are an accountable institution, your obligations come from your own compliance programme, and a screening report is one record in it.
How to run a screen
- Use the full name as it appears on the person's ID or the company's registration documents. Nicknames and shortened names miss matches.
- Screen the people behind a company as well as the company itself: its directors and the people who own or control it.
- Record why you screened and when. Lists change, so a clear result is true only on the day it was run.
CheckID's sanctions and PEP screening screens one person or company name for R79, through our verification provider VerifyNow, and emails a dated PDF within minutes. It needs a name only, not an ID number. The report names the list or source for each possible match and the list version used, where the provider gives them, and keeps the purpose you gave for your audit file.
How to read a possible match
Screening works on names, and names are shared. A possible match means a list entry has a name like the one you entered. It is not a finding that your customer or supplier is sanctioned.
- Compare the other details on the entry, such as date of birth, nationality, country and position, with what you know about the person or company.
- If they clearly differ, record why you ruled the match out and carry on.
- If they could be the same, ask for more information before you go ahead, and get compliance or legal advice before you deal with a possible sanctioned party.
- A PEP match is a reason to ask more questions, such as where the money comes from, not a reason on its own to refuse the business.
What a sanctions screen does not cover
- Criminal records. A criminal record check is a separate, consent-based check. CheckID's screen does not include criminal records and drops anything about them before the report is built. See background checks in South Africa.
- Identity. A screen does not prove the person is who they say they are. Check the ID number against Home Affairs records for that.
- Credit or company standing. A clear screen says nothing about whether a customer can pay or a company is registered.
To confirm the person's ID number goes with their name, use Home Affairs ID Verification (R39.90, once-off).
To find the companies a person is a director of before you screen them, use the CIPC Director Verification (R299, once-off).
POPIA and screening
A name is personal information, so you need a lawful reason to screen it, such as meeting a legal obligation or preventing fraud. Tell people in your onboarding terms that you screen, use the result only for that purpose, and keep it only as long as your policy requires.
Ready to screen a name? Run a sanctions and PEP screen for R79, with no subscription.